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The dynamics of the global and economic changes in today’s world has made every planner pay closer attention to the Force Majeure clause in contracts.
Before you breathe too big a sigh of relief that many of the issues are covered by this clause, you may still lose revenue. Ask yourself: is this an amount your organization cannot afford to assume? Giving as much thought to event cancellation insurance as you do to the Force Majeure clause may help you avoid such a loss. Here are some considerations that will help you evaluate your needs:
- Look at the big picture. Can you afford to assume the risk? If your association depends on the income from the annual meeting for over 50% of its budget, read on...
- If your primary concern is terrorism, coverage is usually an expensive addition to the basic policy. Coverage for terrorism is provided at different levels and full coverage is substantially more costly than the limited version, which is quite time- and place-restricted.
- More groups have been purchasing cancellation coverage since 9/11 but at a higher cost and with more limited coverage. Basic coverage is usually for Force Majeure-type events such as extreme weather conditions, strikes and utilities blackouts. Commonly excluded are decreased attendance, earthquakes, communicable diseases, and war – some of the very circumstances that groups seek protection from. The cost for basic coverage is around half of one percent of your estimated revenue.
- Where and when the meeting is to take place will influence the cost. Coverage for a meeting in Denver in January will cost more than for the same meeting in Indianapolis in May.
- Fear of travel is not covered. Without an official warning for extreme weather conditions or a curtailment of transportation facilities, coverage for adverse weather or terrorism is not likely to apply.
- Purchase insurance as far in advance as possible since conditions could change in the city you're meeting in, which could create new exclusions.
- See this link for details and insurance broker contact information:
http://am.meetingsnet.com/ar/meetings_covered/index.htm
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